AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 17, 2002
REGISTRATION NO. 333 - _____
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------
BLUE RHINO CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 56-1870472
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
104 CAMBRIDGE PLAZA DRIVE
WINSTON-SALEM, NORTH CAROLINA 27104
(336) 659-6900
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
BILLY D. PRIM
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
BLUE RHINO CORPORATION
104 CAMBRIDGE PLAZA DRIVE
WINSTON-SALEM, NORTH CAROLINA 27104
(336) 659-6900
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPY TO:
PETER A. ZORN, ESQ.
WOMBLE CARLYLE SANDRIDGE & RICE, PLLC
ONE WEST FOURTH STREET
WINSTON-SALEM, NC 27101
(336) 721-3634
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: At such time
or times after the effective date of this Registration Statement as the selling
stockholder shall determine.
If any of the securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ] ________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering. [ ] ________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED TO BE REGISTERED (1)(2) PRICE PER UNIT (3) OFFERING PRICE (3) REGISTRATION FEE
- --------------------------- ----------------------- ------------------ ------------------ ----------------
Common Stock .............. 1,372,071 shares $12.10 $16,602,059 $1,528
(1) Includes shares of common stock issuable upon exercise of a warrant
held by the selling stockholder. Pursuant to Rule 416 under the Securities Act
of 1933, the number of shares of common stock registered hereby shall include
an indeterminate number of shares of common stock that may be issued in
connection with a stock split, stock dividend, recapitalization or similar
event or upon adjustment of the number of shares issuable upon exercise of the
warrant in accordance with certain anti-dilution provisions contained therein.
(2) All of the shares of common stock offered hereby are being sold for
the account of the selling stockholder. See "Selling Stockholder."
(3) Estimated solely for purposes of calculating the registration fee, and
based on the average of the high and low prices for the Registrant's common
stock as reported on the Nasdaq National Market on July 15, 2002 in accordance
with Rule 457 under the Securities Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH SECTION 8(A),
MAY DETERMINE.
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1,372,071 Shares
[BLUE RHINO LOGO]
Common Stock
This prospectus is part of a registration statement that covers the
sale from time to time by one of our stockholders of 1,372,071 shares of our
common stock. We will not receive any proceeds from the sale of the shares of
common stock. We will bear the costs relating to the registration of the shares
of common stock, which we estimate will be approximately $21,547.
The Common Stock is traded on the Nasdaq National Market under the
symbol "RINO." On July 15, 2002, the last reported sale price for the Common
Stock on the Nasdaq National Market was $12.15 per share.
INVESTING IN THE COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK
FACTORS" BEGINNING ON PAGE 3.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated July 17, 2002
You should rely only on the information contained in this prospectus.
We have not authorized any other person to provide you with different
information. If anyone provides you with different or inconsistent information,
you should not rely on it. We are not making an offer to sell these securities
in any jurisdiction where the offer or sale is not permitted. You should assume
that the information appearing in this prospectus is accurate as of the date on
the front cover of this prospectus only, regardless of the time of delivery of
this prospectus or any sale of our common stock. Our business, financial
condition, results of operations and prospects may have changed since that
date.
As used in this prospectus, the terms "we," "us," "Blue Rhino" and
"the Company" refer to Blue Rhino Corporation and its subsidiaries, CPD
Associates, Inc., QuickShip, Inc., Rhino Services, L.L.C., USA Leasing, L.L.C.
and Uniflame Corporation, except where it is made clear that any such term
means only the parent company. The Blue Rhino name and logo, the names
RhinoTUFF(R), Tri-Safe(R), Bison(R), Uniflame(R), UniGrill(R), DuraClay(R),
GardenArt(R), America's Choice For Grill Gas(R), Endless Summer(TM), Endless
Summer Comfort(TM), Grill Gas & Design(TM), Harmony(TM), ShippingSpot(TM) and
SkeeterVac(TM) are our registered and pending trademarks. This prospectus may
also include trademarks of other companies. Our principal offices are located
at 104 Cambridge Plaza Drive, Winston-Salem, North Carolina 27104 and our
telephone number is (336) 659-6900.
THE COMPANY
We believe we are the leading national provider of gas grill cylinder
exchange and a leading provider of other branded products and services to
retailers, with Blue Rhino cylinder displays at more than 26,000 retail
locations in 46 states and Puerto Rico. Cylinder exchange provides consumers
with a convenient means to exchange empty grill cylinders for clean, safe,
precision-filled cylinders. We offer our cylinder exchange at many major home
improvement centers, mass merchants, and hardware, grocery and convenience
stores including Home Depot, Lowe's, Wal*Mart, Sears, Kmart, Kroger, Food Lion,
Winn-Dixie, SuperAmerica, Circle K and ExxonMobil.
We partner with retailers and independent distributors to provide
consumers with a nationally-branded alternative to traditional grill cylinder
refill. We dedicate our efforts and capital to brand development, value-added
marketing, customer service, cylinders, displays, account growth, distributor
network development and management information systems. Our 43 independent
distributors make the investments in the vehicles and other equipment necessary
to operate cylinder exchange businesses. To facilitate improved service by our
distributors in the Southeastern United States, we have invested in an
automated propane bottling and cylinder refurbishing plant in North Carolina.
We have strategically expanded our business to diversify our revenue
stream, balance our seasonality and establish more products that use our base
grill cylinder exchange service. By acquisition, we have expanded our offerings
to include an array of products including barbecue grills, patio heaters, a
proprietary overfill prevention device, fireplace accessories and garden
products that are sold primarily through home centers, mass merchants and
hearth stores throughout the United States, as well as an in-store retail
shipping service currently offered through major grocery retailers.
COMPANY BACKGROUND AND CONTACT INFORMATION
We were incorporated in North Carolina on March 24, 1994 and
reincorporated in Delaware on December 16, 1994. We have five wholly owned
subsidiaries: Rhino Services, L.L.C., a Delaware limited liability company; CPD
Associates, Inc., a North Carolina corporation; USA Leasing, L.L.C., a Delaware
limited liability company; Uniflame Corporation, a Delaware corporation; and
QuickShip, Inc., a Delaware corporation. Rhino Services offers centralized
purchasing services to our distributors; CPD Associates holds certain of our
intangible assets; USA Leasing offers cylinder leasing service to our
distributors; Uniflame sells various products including patio heaters, barbecue
grills, garden art and fireplace accessories; and QuickShip offers retail
shipping services.
Our principal executive offices are at 104 Cambridge Plaza Drive,
Winston-Salem, North Carolina 27104, and our telephone number is (336)
659-6900.
THE OFFERING
Securities offered..... 1,372,071 shares of common stock that may be offered
and sold from time to time by the selling
stockholder.
Offering price......... All or part of the shares offered hereby may be sold
from time to time in amounts and on terms to be
determined by the selling stockholder at the time of
the sale.
Risk factors........... See "Risk Factors" for a discussion of factors you
should carefully consider before deciding to acquire
the shares of common stock offered under this
prospectus.
Nasdaq symbol.......... RINO
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RISK FACTORS
You should carefully consider the risks described below and the risks
referenced under "Forward-Looking Statements" on page 5 of this prospectus
before making the decision to acquire the shares of common stock offered under
this prospectus. The risks and uncertainties described below or referenced
under "Forward-Looking Statements" are not the only ones we face. Additional
risks and uncertainties not presently known to us or that we currently deem
immaterial may also significantly impair our business, financial condition and
results of operations.
If any of the following risks actually occurs, our business, financial
condition and results of future operations could be materially and adversely
affected. In such case, the trading price of our common stock could decline,
and you could lose all or part of your investment.
OUR REVENUES ARE CONCENTRATED WITH A LIMITED NUMBER OF RETAILERS UNDER
NONEXCLUSIVE ARRANGEMENTS THAT THEY MAY TERMINATE AT WILL. IF ONE OR MORE OF
THESE RETAILERS WERE TO MATERIALLY REDUCE OR TERMINATE ITS BUSINESS WITH US,
OUR REVENUES MAY SUFFER.
None of our significant retail accounts are contractually bound to
offer Blue Rhino cylinder exchange or Uniflame products. Therefore, retailers
can discontinue Blue Rhino cylinder exchange or sales of Uniflame products at
any time and offer a competitor's cylinder exchange or products or none at all.
Continued relations with a retailer depend upon various factors, including
customer service, consumer demand, competition and cost. In addition, certain
of our retailers have multiple vendor policies and may seek to offer a
competitor's cylinder exchange program or products competitive with Uniflame's
products at new or existing locations. If any significant retailer materially
reduces, terminates or is unwilling to expand its relationship with us, our
revenues may suffer.
IF OUR DISTRIBUTORS DO NOT PERFORM TO OUR RETAILERS' EXPECTATIONS, OR IF OUR
DISTRIBUTORS AND MANAGEMENT TEAM IS UNABLE TO MANAGE OUR GROWTH SUCCESSFULLY,
ONE OR MORE OF OUR RETAILERS MAY TERMINATE ITS RELATIONSHIP WITH US, CAUSING
OUR REVENUES TO SUFFER.
We rely exclusively on independent distributors to deliver our
products to retailers. Our success will depend on our ability to maintain
existing distributor relationships and on the distributors' ability to continue
to operate viable businesses generally and to set up and adequately service an
expanding base of retail accounts specifically. We exercise only limited
influence over the resources that our independent distributors devote to
cylinder exchange. We could suffer a loss of consumer or retailer goodwill if
our distributors do not adhere to our quality control and service guidelines or
fail to ensure an adequate and timely supply of cylinders at retail locations.
The poor performance of a single distributor to a national retailer could
jeopardize our entire relationship with that retailer and cause our revenues to
suffer.
The number of retail locations offering Blue Rhino cylinder exchange
and our corresponding sales have grown significantly over the past several
years along with the creation of our independent distributor network. For us to
continue to grow, our distributors must be able to adequately service an
increasing number of retail accounts. Certain distributors have experienced
service problems in the past, particularly during peak demand periods such as
holiday weekends. Our retailers impose demanding service requirements on us,
and our retail relationships will be jeopardized if our distributors fail to
meet these requirements. Our executive officers, who have only limited prior
experience managing a public company, must implement and improve operational
and financial systems and train and manage our employee base in order to manage
our expanding retailer and distributor relationships. If we fail to manage our
growth effectively, our business may suffer.
IF OUR SUPPLIERS OF CYLINDERS AND VALVES DO NOT PERFORM TO OUR EXPECTATIONS, WE
MAY NOT BE ABLE TO SERVICE OUR RETAIL ACCOUNTS AND OUR CYLINDER EXCHANGE
BUSINESS MAY SUFFER.
To adequately service our retail accounts, our distributors need a
sufficient supply of cylinders and valves. As of the date of this prospectus,
there are only two major cylinder suppliers and only six major valve suppliers
in the U.S. market. The implementation of National Fire Protection Association
guidelines requiring the introduction of valves with overfill prevention
devices (OPDs) and growth in propane grill sales and use could increase demand
for cylinders and valves. If our distributors are unable to obtain sufficient
quantities of cylinders or valves, delays or reductions in cylinder
availability for our retail accounts could occur, which may cause our business
to suffer.
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IF OUR MANAGEMENT INFORMATION SYSTEMS DO NOT PERFORM TO OUR EXPECTATIONS, WE
MAY BE REQUIRED TO EXPEND SIGNIFICANT ADDITIONAL RESOURCES OR TO INVEST
ADDITIONAL CAPITAL TO MANAGE OUR BUSINESS EFFECTIVELY.
We depend on our management information systems (MIS) to process
orders, manage inventory and accounts receivable collections, maintain
distributor and customer information, maintain cost-efficient operations and
assist distributors in delivering products on a timely basis. In addition, our
staff of five MIS professionals relies heavily on the support of Information
Management System Services (IMSS), a division of R. J. Reynolds Tobacco
Company. Any disruption in the operation of our MIS, the loss of employees
knowledgeable about such systems, the termination of our relationship with IMSS
or our failure to continue to effectively modify such systems as our business
expands could require us to expend significant additional resources or to
invest additional capital to continue to manage our business effectively.
IF WE ARE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY, WE MAY LOSE ASSETS OR
REQUIRE COSTLY LITIGATION TO PROTECT OUR RIGHTS.
We consider our trademarks, particularly the Blue Rhino logo and name,
and the design of our product packaging to be valuable to our business and the
establishment of our national branded cylinder exchange program. We rely on a
combination of copyright and trademark laws and other arrangements to protect
our proprietary rights and could incur substantial expense to enforce our
rights under copyright or trademark laws. The requirement to change any of our
trademarks, service marks or trade name could entail significant expense,
result in the loss of any goodwill associated with that trademark, service mark
or trade name, and impact our ability to apply for copyrights and additional
trademarks in the future.
ADVERSE CHANGES IN THE PREVAILING POLITICAL OR ECONOMIC CLIMATES IN CHINA COULD
REDUCE THE SUPPLY OF PRODUCTS AVAILABLE TO US FOR SALE OR REQUIRE US TO INCUR
ADDITIONAL EXPENSE TO IMPORT PRODUCTS FOR SALE.
We rely on the products segment of our business, conducted through
Uniflame Corporation, a wholly owned subsidiary, for a significant percentage
of our net sales. Uniflame imports a significant percentage of its products
from companies based in China. As a result, Uniflame may be adversely affected
by changes in the prevailing political or economic climates in China. In
addition, if China were to lose its "most favored nation" trade status with the
United States, there would likely be an increase in duty for Uniflame's
products, which may reduce gross margins for our products segment and cause our
results of operations to suffer.
PROPANE SUPPLIES AND COSTS ARE UNPREDICTABLE AND PROPANE PRICE INCREASES COULD
IMPACT OUR PROFIT MARGINS.
Our distributors purchase propane from natural gas providers and oil
refineries that produce propane as a by-product of the refining process. Our
automated propane bottling and cylinder refurbishing plant in North Carolina,
which is operated by our jointly-owned R4 Technical Center, also purchases
propane. The supply and price of propane fluctuates depending upon underlying
natural gas and oil prices and the ability of suppliers to deliver propane. A
substantial increase in propane prices could lead to decreased profit margins
for us or for our distributors and could impact our distributors' ability or
desire to service our retail accounts.
PROPANE IS A VOLATILE PRODUCT AND WE FACE POTENTIAL PRODUCT LIABILITY EXPOSURE.
Propane is a gas that, if exposed to flame or high pressure, may
ignite or explode, potentially causing significant property damage and bodily
harm. In the past, fires and other incidents have occurred at refurbishing and
refilling facilities operated by us and our distributors that resulted in
bodily injuries and substantial property damage. Because of the volatility of
propane, accidents may occur during the refurbishing, refilling, transport,
storage, exchange, use or disposal of cylinders and other Blue Rhino products.
Because the Blue Rhino name and logo are prominently displayed on all
cylinders, cylinder displays and other Blue Rhino products, such as patio
heaters, we could be subjected to damage claims. In addition, we could be
subject to additional product liability for barbecue grills sold by Uniflame
Corporation and for the failure of an OPD valve, regardless of whether such
valve was fitted on a Blue Rhino cylinder.
We could also be subject to claims related to manufacturing defects or
workplace accidents at our automated propane bottling and cylinder refurbishing
plant operated by the R4 Technical Center. If an accident happens, we could
incur substantial expense, receive adverse publicity and suffer a loss of
sales. A cylinder-related accident involving personal injury could result in
product liability actions against us or our distributors and could affect the
willingness of retailers to offer or consumers to use cylinder exchange.
Adverse publicity relating to any such incident could also affect our
reputation and the perceived benefits of cylinder
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exchange. Furthermore, we cannot be sure that insurance will provide sufficient
coverage in any particular case or that we or our distributors will be able to
continue to obtain insurance coverage at acceptable levels and cost.
FAILURE TO COMPLY WITH THE REGULATIONS GOVERNING PROPANE MAY SUBJECT US TO
FINES, PENALTIES AND/OR INJUNCTIONS THAT MAY MATERIALLY AND ADVERSELY AFFECT
OUR CYLINDER EXCHANGE BUSINESS.
Federal, state and local authorities regulate the transportation,
handling, storage and sale of propane in order to protect consumers, employees,
property and the environment. The handling of propane in most regions of the
United States is governed by guidelines published by the National Fire
Protection Association in Pamphlets 54 and 58. These guidelines currently
require that all cylinders produced or recertified after September 30, 1998,
and all grill cylinders refilled after April 1, 2002 must be fitted with an
overfill prevention device valve. Failure of our distributors to comply with
these regulations could subject us to potential governmental action for
violation of such regulations, which could result in fines, penalties and/or
injunctions.
POTENTIAL RETAIL PARTNERS MAY NOT BE ABLE TO OBTAIN NECESSARY PERMITS OR MAY BE
SUBSTANTIALLY DELAYED IN OBTAINING NECESSARY PERMITS, WHICH MAY MATERIALLY AND
ADVERSELY AFFECT OUR ABILITY TO GROW OUR CYLINDER EXCHANGE RETAIL LOCATIONS.
Local ordinances, which vary from jurisdiction to jurisdiction,
generally require retailers to obtain permits to store and sell propane
cylinders. These ordinances influence retailers' acceptance of cylinder
exchange, distribution methods, cylinder packaging and storage. The ability and
time required to obtain permits varies by jurisdiction. Delays in obtaining
permits have from time to time significantly delayed the installation of new
retail locations. Some jurisdictions have refused to issue the necessary
permits, which has prevented some installations. Certain jurisdictions may also
impose additional restrictions on our ability to market and our distributors'
ability to transport cylinders or otherwise maintain our cylinder exchange
program. Revisions to these regulations, or violations of current or future
regulations by us or by our distributors, may reduce the number of retail
locations for our cylinder exchange business.
FORWARD-LOOKING STATEMENTS
This prospectus, including the documents that we have incorporated by
reference, contains forward-looking statements. These statements relate to
future events or our future financial performance and involve known and unknown
risks, uncertainties and other factors that may cause our actual results,
levels of activity, performance or achievements to be materially different from
any future results, levels of activity, performance or achievements expressed
or implied by these forward-looking statements. These risks, uncertainties and
other factors include, among other things, those listed under "Risk Factors"
and elsewhere in this prospectus and those described under "Business -
Additional Factors that may Affect our Business or Future Results" in our
Annual Report on Form 10-K/A for the year ended July 31, 2001 or in subsequent
filings made by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended, that are incorporated by reference
in this prospectus. In some cases, you can identify forward-looking statements
by terminology such as "may," "will," "should," "expects," "intends," "plans,"
"anticipates," "believes," "estimates," "predicts," "potential," "continue," or
the negative of these terms or other comparable terminology. These statements
are only predictions. Actual events or results may differ materially. In
evaluating these statements, you should carefully consider the various risks,
uncertainties and other factors. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements. We are under
no duty to update any of the forward-looking statements after the date of this
prospectus.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and periodic reports, proxy statements and
other information with the United States Securities and Exchange Commission
(the "SEC"). You may inspect these documents without charge at the principal
office of the SEC located at 450 Fifth Street, N.W., Washington, D.C. 20549,
and you may obtain copies of these documents from the SEC's Public Reference
Room at its principal office. Information regarding the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330. The SEC maintains a
web site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the SEC. The
address of the SEC's web site is http://www.sec.gov. Our Internet address is
http://www.bluerhino.com. You may also review information about our company at
the offices of Nasdaq, located at 1735 K Street, N.W., Washington, D.C. 20006.
We have filed a registration statement on Form S-3 with the SEC
relating to the offering of common stock pursuant to this prospectus. The
registration statement contains information not found in this prospectus. For
further information, you should refer to the registration statement, which you
can inspect and copy in the manner and at the sources described above. Any
statements we
5
make in this prospectus, or that we incorporate by reference in this
prospectus, concerning the provisions of any document filed as an exhibit to
the registration statement or otherwise filed with the SEC are not necessarily
complete and, in each instance, reference is made to the copy of such document
so filed.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we
file with it, which means that we can disclose important information to you by
referring you to those documents that we have previously filed with the SEC or
documents that we will file with the SEC in the future. The information
incorporated by reference is considered to be part of this prospectus, and
later information that we file with the SEC will automatically update and
supersede this information. We incorporate by reference the documents listed
below into this prospectus, and any future filings made by us with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, as amended, until the termination of this offering. The documents we
incorporate by reference are:
- Our Annual Report on Form 10-K for the fiscal year ended July
31, 2001, as amended on Form 10-K/A filed on April 4, 2002;
- Our Quarterly Reports on Form 10-Q for the quarters ended
October 31, 2001 and January 31, 2002, in each case as
amended on Form 10-Q/A filed on April 5, 2002, and for the
quarter ended April 30, 2002;
- Our Current Reports on Form 8-K/A filed November 14, 2001 and
on Form 8-K filed April 23, 2002; and
- The description of our common stock contained in our
registration statement on Form 8-A under the Exchange Act as
filed with the SEC on May 19, 1998.
You may request a copy of any of these filings, at no cost to you, by
writing or telephoning us at the following address and telephone number: Mark
Castaneda, Chief Financial Officer, Blue Rhino Corporation, 104 Cambridge Plaza
Drive, Winston-Salem, North Carolina 27104; telephone number (336) 659-6900.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of common
stock by the selling stockholder.
SELLING STOCKHOLDER
The shares of common stock offered hereby are issuable to Allied
Capital Corporation upon the exercise of a warrant issued by the Company on
June 15, 2001. The following table sets forth, for the selling stockholder, the
amount of Blue Rhino common stock beneficially owned, the number of shares of
common stock offered hereby and the number of shares of common stock to be held
and the percentage of outstanding common stock to be beneficially owned after
completion of this offering (assuming the sale of all shares offered under this
prospectus). The selling stockholder is also the holder of a Senior
Subordinated Debenture dated June 15, 2001 in the original principal amount of
$15,000,000 payable by the Company.
Shares to be Percentage Beneficial
Shares Beneficially Owned Ownership After
Beneficially Shares after Completion of Completion of
Name Owned (1) Offered Hereby this Offering (1) this Offering
---- ------------ -------------- ------------------ ---------------------
Allied Capital Corporation 1,372,071 1,372,071 0 0
- ---------
(1) Beneficial ownership is determined in accordance with the rules of the
SEC. In computing the number of shares beneficially owned by a person
and the percentage ownership of that person, shares of common stock
subject to options, warrants or convertible securities held by that
person that are currently convertible or exercisable or convertible or
exercisable within 60 days of the date hereof are deemed outstanding.
The selling stockholder has sole voting and investment power with
respect to the shares set forth opposite the stockholder's name.
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PLAN OF DISTRIBUTION
The selling stockholder may sell the shares on any stock exchange,
market, or trading facility on which the shares are traded, in private
transactions, or otherwise, at market prices prevailing at the time of sale, at
prices related to the prevailing market prices or at negotiated prices. In
addition, the selling stockholder may sell some or all of its shares through:
- a block trade in which a broker-dealer may resell a portion
of the block, as principal, in order to facilitate the
transaction;
- purchases by a broker-dealer, as principal, and resale by the
broker-dealer for its account;
- ordinary brokerage transactions and transactions in which a
broker solicits purchasers;
- an underwritten public offering;
- any other method permitted pursuant to applicable law; or
- a combination of any such methods of sale.
When selling the shares, the selling stockholder may enter into
hedging transactions. For example, the selling stockholder may:
- enter into transactions involving short sales of the shares
by broker-dealers;
- sell shares short and redeliver such shares to close out
short positions;
- enter into option or other types of transactions that require
the selling stockholder to deliver shares to a broker-dealer,
who will then resell or transfer the shares under this
prospectus; or
- loan or pledge the shares to a broker-dealer, who may sell
the loaned shares or, in the event of default, sell the
pledged shares.
The selling stockholder may negotiate and pay broker-dealers'
commissions, discounts or concessions for their services. Broker-dealers
engaged by the selling stockholder may allow other broker-dealers to
participate in resales. However, the selling stockholder and any broker-dealers
involved in the sale or resale of the shares may qualify as "underwriters"
within the meaning of Section 2(a)(11) of the Securities Act of 1933. In
addition, the broker-dealers' commissions, discounts or concessions may qualify
as underwriters' compensation under the Securities Act. The Company has agreed
to indemnify the selling stockholder against certain liabilities, including
liabilities arising under the Securities Act. If the selling stockholder
qualifies as an "underwriter," it will be subject to the prospectus delivery
requirements of Section 5(b)(2) of the Securities Act. Each broker-dealer
engaged by the selling stockholder (or by a broker-dealer engaged by the
selling stockholder) must be registered or licensed in each state in which such
broker-dealer conducts offers and sales of shares of the selling stockholder.
In addition to selling its shares under this prospectus, the selling
stockholder may:
- agree to indemnify any broker-dealer or agent against certain
liabilities related to the selling of the shares, including
liabilities arising under the Securities Act;
- transfer the shares in other ways not involving market makers
or established trading markets, including directly by gift,
distribution or other transfer; or
- sell the shares under Rule 144 of the Securities Act rather
than under this prospectus, if the transaction meets the
requirements of Rule 144.
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As used herein, the term "selling stockholder" includes donees,
pledgees, transferees or other successors-in-interest selling shares received
after the date of this prospectus from the selling stockholder as a gift,
pledge, partnership distribution or other non-sale related transfer.
Upon the Company being notified by a selling stockholder that any
material arrangement has been entered into with a broker-dealer or underwriter
for the sale of shares through a block trade, special offering, exchange
distribution or secondary distribution or a purchase by a broker or dealer, a
prospectus supplement will be filed, if required, pursuant to Rule 424(b) under
the Securities Act, disclosing: (1) the name of the selling stockholder and of
the participating broker-dealer(s) or underwriter(s), (2) the number of shares
involved, (3) the price at which such shares were or will be sold, (4) the
commissions paid or to be paid or discounts or concessions allowed to such
broker-dealer(s) or underwriter(s), where applicable, (5) that, as applicable,
such broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this prospectus and (6)
other facts material to the transaction. In addition, upon the Company being
notified by the selling stockholder that a donee, pledgee, transferee or other
successor-in-interest intends to sell more than 500 shares, a prospectus
supplement will be filed, if required.
LEGAL MATTERS
The validity of the common stock being offered hereby has been passed
upon for us by Womble Carlyle Sandridge & Rice, PLLC, Winston-Salem, North
Carolina. As of the date of this prospectus, certain members of Womble Carlyle
Sandridge & Rice, PLLC owned an aggregate of approximately 1,000 shares of our
common stock.
EXPERTS
The consolidated financial statements of Blue Rhino Corporation
appearing in Blue Rhino Corporation's Form 10-K/A for the year ended July 31,
2001, have been audited by Ernst & Young, LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.
8
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the Registrant in connection
with the sale of the common stock being registered hereby. All amounts are
estimates except the SEC registration fee.
Amount to Be Paid by
Registrant
--------------------
SEC registration fee.......................................... $ 1,547
Legal fees and expenses....................................... $ 7,500
Accounting fees and expenses.................................. $ 7,500
Printing and engraving expenses............................... $ 5,000
Miscellaneous................................................. --
Total......................................................... $21,547
=======
The Registrant intends to pay all expenses of registration, issuance and
distribution.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law (the "DGCL")
authorizes indemnification of directors, officers, employees and agents of the
Registrant; allows the advancement of costs of defending against litigation;
and permits companies incorporated in Delaware to purchase insurance on behalf
of directors, officers, employees and agents against liabilities whether or not
in the circumstances such companies would have the power to indemnify against
such liabilities under the provisions of the statute. The Registrant's Second
Amended and Restated Certificate of Incorporation, as amended ("Charter"),
provides that the Registrant will indemnify its directors and officers to the
fullest extent permitted by law.
Under the provisions of the Charter, any director or officer who, in
his or her capacity as such, is made or threatened to be made a party to any
suit or proceeding shall be indemnified if the Board of Directors determines
such director or officer acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
Registrant or, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The Registrant
will not however indemnify any director or officer where such director or
officer: (i) breaches his or her duty of loyalty to the Registrant or its
stockholders; (ii) fails to act in good faith or engages in intentional
misconduct or knowing violation of law; (iii) authorizes an unlawful payment of
a dividend or stock repurchase or redemption; or (iv) obtains an improper
personal benefit. While liability for monetary damages has been eliminated,
equitable remedies such as injunctive relief or rescission remain available. In
addition, a director is not relieved of his or her responsibilities under any
other law, including the federal securities laws.
Indemnification under the Charter and the Registrant's Amended and
Restated Bylaws ("Bylaws") includes payment by the Registrant of expenses in
defending an action, suit or proceeding in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking by the
indemnified party to repay such advance if it is ultimately determined that
such person is not entitled to indemnification under the Charter, which
undertaking may be accepted without reference to the financial ability of such
person that makes such repayments. The Registrant is not responsible for the
indemnification of any person seeking indemnification in connection with a
proceeding initiated by such person unless the initiation was approved by the
Board of Directors of the Registrant. The Charter and the DGCL further provide
that such indemnification is not exclusive of any other rights to which such
individuals may be entitled under the Charter, the Bylaws, any agreement, any
vote of stockholders or disinterested directors, or otherwise. The Registrant
carries directors' and officers' insurance covering its executive officers and
directors.
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ITEM 16. EXHIBITS
Exhibit Number Description of Exhibit
- -------------- ----------------------
4.1 Form of Certificate of Common Stock of the Company (incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-1 dated May 18, 1998)
4.2(a) Second Amended and Restated Certificate of Incorporation of the Company, as amended (incorporated by
reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K for the year ended July 31, 2000)
4.2(b) Certificate of Designation, Rights and Preferences of Series A Convertible Preferred Stock dated
September 7, 2000 (incorporated by reference to Exhibit 4.10 to the Company's Registration Statement on
Form S-3 dated September 25, 2000)
4.2(c) Certificate of Designation, Number of Authorized Shares of Series A Convertible Preferred Stock dated
October 25, 2000 (incorporated by reference to Exhibit 4.11 to the Company's Annual Report on Form 10-K for
the year ended July 31, 2000)
4.3 Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company's
Registration Statement on Form S-1 dated March 10, 1998)
4.4 Investor Rights Agreement among the Company, Allied Capital Corporation and the stockholders of the Company
listed therein dated June 15, 2001 (incorporated by reference to Exhibit 4.13 to the Company's Annual Report
on Form 10-K for the year ended July 31, 2001)
4.5 Common Stock Purchase Warrant of the Company dated as of June 15, 2002 issued to Allied Capital Corporation
(incorporated by reference to Exhibit 4.12 to the Company's Annual Report on Form 10-K for the year ended
July 31, 2001)
5 Opinion of Womble Carlyle Sandridge & Rice, PLLC
23.1 Consent of Womble Carlyle Sandridge & Rice, PLLC (included in Exhibit 5)
23.2 Consent of Ernst & Young LLP
23.3 Consent of Ernst & Young LLP
23.4 Consent of Ernst & Young LLP
24 Power of Attorney (included on signature page of this Registration Statement)
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information
set forth in the registration statement; provided, however, that
notwithstanding the foregoing, any increase or
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decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 of Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Winston-Salem, State of
North Carolina, on July 17, 2002.
Blue Rhino Corporation
By: /s/ Billy D. Prim
-------------------------------
Billy D. Prim
Chairman of the Board,
President and Chief
Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints Billy D. Prim and Mark Castaneda, and each of them, the true and
lawful attorneys-in-fact and agents of the undersigned, with full power of
substitution and resubstitution, for and in the name, place and stead of the
undersigned, in any and all capabilities, to sign any and all amendments
(including post-effective amendments, exhibits thereto and other documents in
connection therewith) to this Registration Statement and any subsequent
registration statement filed by the Registrant pursuant to Rule 462(b) of the
Securities Act of 1933, as amended, which relates to this Registration
Statement, and to file the same, with all exhibits thereto and all documents in
connection therewith, with the Securities and Exchange Commission, and hereby
grants to such attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-3 has been signed below by the following
persons in the capacities indicated on July 17, 2002.
/s/ Billy D. Prim Chairman of the Board, President and Chief
- ------------------------- Executive Officer (Principal
Billy D. Prim Executive Officer)
/s/ Mark Castaneda Secretary, Chief Financial Officer and
- ------------------------- Director (Principal Financial and
Mark Castaneda Accounting Officer)
/s/ Andrew J. Filipowski Vice Chairman of the Board
- -------------------------
Andrew J. Filipowski
/s/ Richard A. Brenner Director
- ------------------------
Richard A. Brenner
/s/ Steven D. Devick Director
- ------------------------
Steven D. Devick
/s/ Robert J. Lunn Director
- ------------------------
Robert J. Lunn
/s/ John H. Muehlstein Director
- ------------------------
John H. Muehlstein
Director
- ------------------------
David L. Warnock
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